Flashcards in Sept Deck (49)
What is a Primary Industry?
Primary production involves the acquiring of raw materials. for example, precious metals are mined from the ground and oil is drilled up from oil wells. This is can be known as extractive production.
What is a Secondary Industry?
Also known as the manufacturing and assembly process, it involves the conversion of raw materials into components. This includes making oil into plastics and construction of houses.
What is a Tertiary Industry?
Tertiary industry refers to the commercial services that support the production and distribution of goods. some examples of this are hairdressers, hospitals, fast food chains, supermarkets and schools.
Why is there a decline in the Primary industry in the UK?
- It's easier to import from other countries
- Mechanisation over manual workers
- robots taking jobs
- businesses relocate overseas
- uk manufacturing has not survived in the increasingly competative de industrialisation
Why is there a decline in the secondary industry in the UK?
- It's easier for businesses to manufacture abroad, abroad companies can take advantage of lower national wage standards, increases competition.
Why is there a increase in the tertiary industry in the UK?
- disposable income is higher = more money for people to spend
- People have more free time and become wealthier
- Impact of IT - more employment, opportunities created
- financial services have been a growth area and many new jobs have been created
- education system garners people for the tertiary sector.
- UK has become more affluent and service demand is greater.
What is a Need?
- Peoples needs are limited. They include things which are needed to survive, such as food, warmth, shelter and security. human's also have psychological needs eg recognition and love
What is a want?
Wants, are infinite. People constantly aim for a better quality of life, might include better housing, healthcare, education etc.
What is a Business?
A collective that provides a good or service to customers to gain profit, usually.
Businesses are here to meet our needs and wants
What is a Good?
A good is tangible eg food and clothes
What is a service?
A service is not tangible eg taxi ride or haircut
What are the benefits of SME's to the Economy?
- Increased flexibility - smaller firms can adapt to change quicker than large firms, helps UK economy quicker with more orders abroad.
- Wage levels might fall as a result of smaller firms. Wages are negotiated on a one to one basis with the owner. Keeps business costs down
- More casual and part time work may have been created. Small firms are more reluctant to employ full time staff because it is more exspensive. Casual and part time workers increase flexibility.
Reasons for popularity of SME's?
- Rising unemployment - People with redundancy payments as capital for their own business.
- the government and local authorities introduced a number of measures to encourage the development of small businesses. This includes:
- Business start up schemes - funds for small businesses
- business link, provides advice
- European initiatives
- training schemes
__---__-- Personal service
- flexibility and efficiency
- Owners preference, easier to make deals
Benefits of SME's to UK?
- Staff loyalty may have been improved due to personal level staff deal with eachother on a daily basis
- consumers might benefit from the growth small firms results in more competition
- further difference is their role innovation. SME's adapt quickly. breeding ground for new industries.
List Facts about SME's in the UK.
- In 2013, there were 4.9 million businesses in the UK, Over 99% were small and medium enterprises
- Small and medium enterprises employed 14,424,000 people in the UK in 2013.
- microbusinesses are businesses with 0.9 employees. there were 5.0 million micro businesses in the uK in 2014 accounting for 96% of all businesses.
- ALthough the vast majority of businesses in the UK employ fewer than 10 people, this sort of business only accounts for 33% of employment and 19% of turnover.
- Large businesses with more than 250 employees accounted for less than 0.1% of businesses in 2014.
What's an entrepreneur?
Someone who has a business entreprise, With success equating to profit and failure leading to personal ruin.
Multiple companies control the market.
What's a stakeholder?
Anyone who has an interest in a particular business, e.g. Coca Cola.
Who are the primary stakeholders of a company?
Who are the secondary stakeholders of a company?
- consumer groups
- local community
- social interest groups
- environmental groups
Reasons for Stakeholders: Shareholders
- high profit
- high dividened
- long term growth
- prospect of capital gain
- a say in the business
a positive corporate image
- preferential treatment as customers
Reasons for Stakeholders: Employees
- high pay
- good working conditions
- promotion prospects
- job security
- fair treatment
- health and safety
- training opportunities
Reasons for Stakeholders: Customers
- value for money
- low prices
- high quality products
- good service
- certain and regular supply
- choice of goods i.e variety
- clear and accurate information
Reasons for Stakeholders: Suppliers
- prompt payment
- long term relationship with firm
- large size and high value contracts
- frequent and regular orders
- fair prices
- growth in firm leading to more orders
Reasons for Stakeholders: Creditors
- prompt payment
- payment of interest on outstanding debt
- repayment at agreed date
- credit worthiness of the organisation
- sufficient positive cash flow
Reasons for Stakeholders: The community
- Employment prospects
- safeguarding the environment
- acceptance of social responsibility
- ethical behaviour
Reasons for Stakeholders: Gov't
- Compliance with laws and regulations
- efficient use of resources
- contribution to the national economy
- payment of taxes
Why do people start up their own businesses?
- To gain a profit, the motive for profit is generally the main reason for starting a business
- To turn a hobby or a pastime into a business, a specialist cake store is most likely owned by someone who has a deep passion for cake baking.
- To be their own boss, they have control of their own destiny, not being underappreciated by a large corporation
- To use redundancy money, some new business people are forced into setting up a business because of redundancy. losing a job, with little chance of finding another one in the near future, is often reason enough to start a business. People will use their redundancy payments as capital to start up their own business
What are characteristics of entrepreneurs?
- Risk takers, entrepreneurs sometimes have to risk capital and their own time to try to create profits. They may remortgage the house, borrow from family and friends to pursue their business idea.
- Having creativity and being innovative, creativity in business means the ability tocome up with innovative ideas and concepts
- Being hard working, successful entreprenuers are, generally hard working, it is estimated that entrepreneurs in the UK work around 52 hours a week compared with the average 38 hours for an employed person.
- Being determined and having perseverance, entrepreneurs also need to be determined, as new businesses have low success rates. Entrepreneurs must also have considerable perseverance, and be willing to keep trying if initial fails
- Be an effective organiser, entrepreneurs have to organise effectively, considering factors like labour, buying inputs, raw materials etc.